PSC Register Shines Light on Murky Corporate Structures
Recent changes to UK company law mean that we can now see through previously opaque corporate structures and obtain information about the ultimate beneficial owners of the business. This information can be important for litigants, especially where the ownership of a business is contested or where one party is trying to hide assets, for example in overseas parent companies.
From 6 April 2016 UK companies are required to maintain a register of Persons with Significant Control (PSC). Significant control essentially means that the person owns or exercises significant control of more than 25% of the shares or voting rights of the company or otherwise exerts that level of influence over the company. This obligation has received a lot of publicity due to the increased administrative burden on companies, but this can be an important source of information that can help to catch out unscrupulous litigants.
Under this new legislation companies are required to maintain a PSC register that is available for inspection and publish information on Companies House. The information contained within this register can be produced as evidence and our specialist litigators at Cripps Pemberton Greenish have been able to use this information to assist clients with:
- Shareholder / inter-company disputes.
- Family / divorce proceedings to challenge a spouse’s attempt to hide assets.
- Contested probate matters.
- Tracing beneficial ownership / identifying assets.
- Corporate due-diligence.
It is an offence for a company to fail to maintain its PSC register or to knowingly or recklessly make a statement that is misleading, false or materially deceptive. If you can establish that information supplied in the register is false or misleading then the directors of the company can face prosecution. The threat of action can also be used to force a company to recognise the rights of a person with significant control to help protect their interest.
For more information see https://www.crippspg.co.uk/the-new-psc-register-your-obligations-at-a-glance/